Quoting records of the finance department, a senior official explained that in view of the huge wage bill and interest and installments of loans, it will be difficult to draft the plan outlay for the next financial year. ``Normally, we begin work on the next plan size in November and this time we feel that the existing plan size of Rs 12,600 crore will have to be reduced to Rs 8000 crore,'' the official said.

Elaborating his contention, the official said the plan size depends on the resource mobilisation capacity of the stategovernment. ``Our main source of income are Excise and Sales tax. Since both have reached a saturation stage, we will have no alternative but to reduce the plan size. It should be realistic,'' the official said.

Meanwhile, Deputy Chief Minister Chhagan Bhujbal said the new government will present a white paper on the financial situation during the on-going session of the state legislature. ``What I was saying when I was leader of opposition, has proved correct. The erstwhile government has led the progressive state to bankruptcy,'' Bhujbal added.

On his part, Vilasrao Deshmukh has asked bureaucrats, to submit concrete plans to meet the situation. Deshmukh said though huge loans were secured, no competent machinery was set up to oversee if the government borrowings were utilised by the various corporation for the purpose they were meant.